Credit Guarantees to SMEs Reach Nearly $140 Million

Credit Guarantees to SMEs Reach Nearly $140 Million

The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $139.5 million to businesses for their working capital expansion as of July 2023.

The credit guarantee has been provided to 1,648 businesses, according to a report on Friday.

CGCC said in a statement that the total amount of outstanding guaranteed loans was $107.51 million, while the total amount of outstanding guaranteed amount was $77.48 million.

There are 1,510 micro, small and medium-sized businesses (MSME) and 138 large businesses get their loan guaranteed, the report said, adding that about 677 were women-owned.

The report stated that a significant portion of the loan guarantees were used for working capital, investment, business expansion, and capital expenditures.

CGCC, the first credit guarantee institution in the country under the Ministry of Economy and Finance, was established in August 2020, during the Covid-19 pandemic to provide timely credit to support the rehabilitation and sustainability of local businesses.

Under the CGCC’s scheme, more than 30 participating financial institutions (PFIs) participate in providing credit as working capital investment and business expansion to SMEs.

Rath Sophoan, CEO and Country Head of Maybank Cambodia, said more credit has been disbursed to SMEs as banks and SMEs have learnt from each other to find the common points of financial assessments.

“With the economy recovering to get back to normal, it is time for SME growth. It requires financing solutions and more banks will increase providing credit to SMEs as banks and SMEs have worked together to find solutions and they understand each other more,” Sophoan said at a forum on supporting SMEs on legal and financial insights for sustainable growth at Olympia City Hotel on Friday.

The credit guarantee scheme has contributed to strengthening entrepreneurship and improving financial inclusion in Cambodia by facilitating the smooth distribution of loans, said Mey Vann, Secretary of State at the Ministry of Economy and Finance.

“The CGCC has played a key role in serving the needs of SMEs in Cambodia, which are struggling in the wake of the Covid-19 pandemic and the inflation crisis, and need credit from banks for their business,” Vann said.

The government will continue to implement supportive policies through credit guarantee mechanisms to ensure the development of small and medium enterprises, he added.

Credit to: Khmer Times, Published on 21 August 2023